South Shore hardware chain tops list of state tax delinquents

Friday

Apr 21, 2017 at 3:28 PMApr 22, 2017 at 4:36 AM

The list includes large outstanding tax bills for businesses and individual taxpayers out of Weymouth, Quincy, Braintree, Marshfield and Pembroke.

WEYMOUTH - It’s been seven years since a chain of South Shore hardware stores abruptly closed, but Massachusetts tax collectors have not forgotten them. A former owner of Joseph’s Hardware and five related corporate entities are now among the state’s top tax scofflaws, owing between $9 million and $12 million in sales, employee withholding and corporate taxes.

The defunct hardware chain dominates a list of the state’s top tax delinquents – those owing more than $25,000 for at least six months – that is posted on the state Department of Revenue’s website. The state began publishing the list in 2004 in a bid to shame taxpayers into getting right with the state.

The list, which also includes large outstanding tax bills for businesses and individual tax payers out of Quincy, Braintree, Marshfield and Pembroke, represents just a portion of the millions of dollars of state taxes that remain uncollected in Massachusetts. The state’s Department of Revenue could not provide an estimate of the total amount of taxes it has been unable to collect, but a two-month amnesty period last year netted $136.8 million from delinquent taxpayers.

“For people who are good citizens and do meet their obligations, it’s very frustrating to know there are people out there who just thumb their noses at it,” said Susan Fargo, a former state senator who sponsored legislation that created the list.

Among those on the state’s public tax delinquency list is the company behind Jimbo’s Steak and Fin, a restaurant that replaced Jimbo’s South in Braintree’s Five corners in 2004 but closed after about four years. The state says it is still owed more than $348,000 by the company, which has three liens against it dating back to 2008 and 2009, secretary of state records show.

Jimbo’s is just one of the many failed restaurants that show up on the list. In Marshfield, the state says it is owed $112,156 by the company behind Ocean Deck – a harbor-side restaurant that opened on Dyke Road in 2009 – and $111,345.00 from one of its former owners.

There’s also William Gauthier, a Quincy man sentenced to three years in jail in 2010 after pleading guilty to stealing more than $1 million from former employers in Suffolk and Middlesex counties. The state says Gauthier, who was ordered to attend Gamblers Anonymous meetings as part of his sentence, owes more than $297,00 in unpaid taxes.

But those pale in comparison to the $12.5 million that the state says it is owed by just one of the corporate entities related to a Joseph’s Do It Best Hardware, a chain of stores that had expanded to include locations in Norwell, Cohasset, Marshfield and Plymouth by the time it abruptly closed in early 2010, its stores and inventories seized by the state. A Department of Revenue spokesman said at the time that the company owed nearly $6 million after years of failing to pay personal income taxes or turn over sales-tax receipts and state income taxes withheld from employee paychecks.

The owners of the chain, Baron Joseph and his wife Jenny Madden, also faced a slew of lawsuits from creditors around the same time, according to court records. Madden’s home in Scituate was sold at foreclosure auction in 2015.

The couple could not be reached for this story. An obituary published last month for Joseph’s brother, Norwell native Spencer “Skip” Joseph, 74, indicated that Baron Joseph is living in Virginia.

Baron Joseph got his start in the retail hardware business in 1982 when he purchased a store on Norwell’s Route 123 from his brother, who had opened it in 1977. Over the next 30 years, he added four other stores and had plans to expand further. In 2008, when he was working on a $1.5 million expansion of his flagship Norwell store, he said he hoped to open another 10 to 15 stores on the South Shore.

But that same year, state investigators began to suspect that Baron was pocketing the state sales taxes paid by customers and the state income tax he withheld from employee paychecks. In 2009, the Department of Revenue placed liens on several corporate entities registered to Baron, saying they owed the state around $6 million.

Then in 2011, the state put a lien on Madden’s home on Roberts Drive in Scituate, saying she owed $8.7 million related to the company.

Jenny Madden and Do It Best Hardware Inc., a company registered to Baron Joseph, have been listed on the state's delinquency list for more than a year, but the other corporate entities related to the chain were added only last month. Nicole Mac Dermott, a spokeswoman for the Department of Revenue, said last week that there are some redundancies on the list, meaning that sOme unpaid tax bills are attributed to more than one person or business.

Mac Dermott said she was barred by taxpayer confidentiality laws from saying what steps the department has taken from going after unpaid taxes owed by Madden and Joseph. Under state law, tax collectors can levy bank accounts and wages, suspend driver’s and professional licenses and seize assets, including cars and businesses. Delinquent tax payers can also be subject to criminal prosecution.

In an effort to get delinquent taxpayers to come forward and pay up, lawmakers have sometimes created temporary “tax amnesty” periods that allow certain taxpayers to settle debts without paying penalties. A two-month amnesty period last spring drew 9,550 taxpayers and $136.8 million in collections.

State law also allows the revenue commissioner to accept less money than a taxpayer owes if he or she is in “serious doubt” about whether the state would be able to collect the full amount due.

State lawmakers added another tool for tax collectors in 2003 when the state was faced with falling tax revenues and the potential of significant state budget cuts. With legislators reluctant to raise taxes, Susan Fargo, then a state senator from Lincoln, suggested Massachusetts follow the example of other states and begin posting a list online of delinquent taxpayers, as it already did for fathers who failed to make child support payments.

“What proved effective was the shaming,” Fargo, who retired from the Legislature in 2012, said last week. “Somebody who was doing quite well and was not fulfilling his civic obligations would find that his neighbors knew about it and were asking about it.”

Neal Simpson may be reached at nesimpson@ledger.com or follow on Twitter @NSimpson_Ledger.